Riyaz Dattu, Paula Olexiuk, Tim Syer, Thomas Isaac
Dec 9, 2015
Recent efforts to crack down on foreign corruption and increase transparency in dealings between Canadian businesses and governments continued in 2015 with two key legal developments. The first was the laying of charges against SNC-Lavalin in relation to alleged corruption in its overseas activities. The second was the enactment of the Extractive Sector Transparency Measures Act (ESTMA). The ESTMA imposes new disclosure and reporting measures on participants in the extractive sectors, with the objective of enhancing transparency and deterring corruption. With the enforcement tools under the ESTMA and the Corruption of Foreign Public Officials Act (CFPOA), the Canadian government now has one of the world’s more robust anti-corruption enforcement regimes.
Corruption Charges Brought Against SNC-Lavalin
In last year’s “Legal Year in Review,” we discussed the RCMP’s three-year criminal investigation into the overseas operations of SNC-Lavalin to determine the existence of corruption. On February 19, 2015, the RCMP National Division brought charges against the SNC-Lavalin Group Inc., its division SNC-Lavalin Construction Inc. and its subsidiary SNC-Lavalin International Inc. (together, SNC-Lavalin). Each entity was charged with one count of corruption under the CFPOA and one count of fraud under the Criminal Code.
The laying of charges against this leading – and respected – Canadian public company confirms that the government is intent on rooting out corruption on the part of Canadian companies, regardless of their reputation and size. The prosecution of these criminal charges will unfold in the months to come, with the first court appearance by the accused currently scheduled for February 2016.
The prosecution of SNC-Lavalin for foreign bribery and fraud is a direct message from the federal government that officers and directors of Canadian corporations should be carefully monitoring the activities of their overseas businesses, including those of their agents, as well as their record-keeping and internal controls. We expect that this will lead to the implementation of riskbased robust anti-corruption compliance programs for those Canadian companies operating overseas that have not yet heeded several prior wake-up calls.